How Debt Affects Our Mental Health

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The UK’s largest personal insolvency practice has released new figures that show that – unsurprisingly – personal debt is having a negative impact on the mental health of individuals affected by financial problems.

In a UK-wide survey of people currently in an Individual Voluntary Arrangement or Protected Trust Deed (IVA/PTD) with Creditfix, 74% of respondents said their personal debt situation had directly led to poor mental health, such as increased anxiety, depression and insomnia. Credit is easy to obtain but difficult to deal with once caught up in a spiral, especially given the shortage of advice facilities in many areas, like Bude.

Of this, 83% experience poor mental health, 32 per cent said they experienced increased levels of anxiety or stress; whilst 22% said they had suffered from insomnia and other sleep related problems. Depression was also cited amongst those tackling debt, with 15% of the people reporting poor mental health saying they felt depressed as a direct result of their increasing debt.

The results of the survey also show that 6% of respondents suffered from weight issues, and 3 per cent had panic attacks as a result of their personal finances.

These results are compounded by the fact that significant proportion of respondents are trying to maintain full or part-time employment, relationships and support their families. As such, the reality of personal debt-related mental health issues is potentially a wider problem in society, with the effects reaching far into communities and the wider economy.

The organisation is exploring further into mental health with the help of industry experts, including support from university academics and additional research planned for 2017.

Jo Brewis, who is Professor of Organisation and Consumption in the School of Business at the University of Leicester, commented:

“Personal finance is now much easier to secure due to the huge range of providers and the advent of new financial services such as payday loans. However, it can also be very complex to understand, which increases the likelihood of defaults. Indeed, individual insolvency rates have been rising across the UK since mid-2015.

“The survey is important research in this context, and the results are extremely worrying. The far-reaching effects of mental illness as a result of personal debt include a greater burden on the NHS as well as the considerable toll for individuals themselves, their families, communities, colleagues and employers.”

Pearse Flynn, CEO of Creditfix, added:

“The impact of personal debt doesn’t stop at someone’s bank statement. Individuals that are struggling with debt need help and support, not to be stigmatised. All our staff are trained to deal with vulnerable customers and to ensure they feel supported and understood – regardless of what level of debt they are dealing with.

“Mental health issues like anxiety and depression are serious conditions that people are struggling with, and can have knock-on effects that impact on family members, friends and work colleagues.

“The worrying fact is that mental health problems can lead people to spiral into further debt. When in fact those that tackle the situation head on and seek help, support and advice are the ones that are able to be financially rehabilitated and enjoy a debt free future.”

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